Effective Factors of Iran's Trade Balance with its Main Trade Partners

As the economy of Iran''s dependence on oil revenues turns the country''s economy vulnerable to foreign fluctuations and shocks resulting in exchange rate crises، it is highly recommended to promote non-oil exports. Therefore، the factors effective on Iran''s trade balance with its main trade partners، getting the highest amounts of Iran''s non-oil exports are pivotal. This article is to study the factors influencing Iran''s trade balance in the form of integrated data on six major trade partners of Iran within the period 1979-2009 based on Bahmani-Oskooee & Brooks model (1999) via ARDL method on the basis of Pesaran and et al. (2001). The results indicate that Iran''s GDP and Exchange Rate Volatility have negative impact on Iran''s trade balance while Iran''s six major trade partners'' integrated GDP and the exchange rates have positive influence on it.